The company's losses on the electric car notwithstanding, it's a worthwhile car in many ways

RECENTLY, CAPITALISTS were scandalized when Fiat and Chrysler Group Chairman Sergio Marchionne revealed that his company loses $10,000 apiece on the Fiat 500e, an electric retrofit of the wee-posh 500 built solely to satisfy California's zero-emission vehicle mandate and sold, for now, only in the Golden State. This sickening perversion of market forces—whereby a tiny fraction of a company's profits are used to mitigate harm caused by its products—was labeled "masochism" by Mr. Marchionne.

Yeah, well, tough. It's the cost of doing business in the biggest vehicle market in the U.S., and a plain-fact acknowledgment that the automobile has public costs—impacts on air quality, climate and health, infrastructure, injury and death. Lest we forget. You can take issue with California's zero-emission vehicle methodology, and you can reach different conclusions with regard to electric vehicles' value to consumers; but it's inarguable that car companies have an obligation to clean up the mess they make.

Photos: 2013 Fiat 500e

Click to view slideshow. Thaddeus Brown for the Wall Street Journal

The airline industry has spent untold millions on quieter airplanes and noise mitigation around airports. Telecoms lose money on the copper-wire landlines maintained to comply with universal-service requirements. If corporations want to dance in the American discothèque, there's a cover charge called the public good.

Mr. Marchionne's remarks at last month's Society of Automotive Engineers Congress in Detroit constitute the most exquisite amnesia. Remember in the run-up to reorganization and Fiat's takeover, when Chrysler generally and Mr. Marchionne singly promised that the merged companies would be as green as chlorophyll? The boss's very public pushback on the 500e builds a floor of suspicion under all the brand's past and future green messaging. Fiat: We don't like it. We don't mean it.

Fiat's losses on the electric car notwithstanding, it's a worthwhile car in many ways, says Dan Neil on the News Hub.

In his SAE Congress speech, Mr. Marchionne argued that structural incentives are favoring electric vehicles in a way that could preclude more promising technical solutions. Like what? Legions of engineers in the room probably wanted to know. This problem—safe, dense energy storage in an automobile with practical range, zero tailpipe emissions and a smaller carbon footprint—has been on the blackboard a long time. Mr. Marchionne held up hydrogen fuel-cell propulsion as an example of faddish technology that proved impractical. But, of course, a fuel-cell car is an electric car, albeit with a complicated hydrogen battery.

‘Fiat's brass has talked down the electric 500, but why knock such a great ride?’

If we are talking about an automobile powered by anything other than, or in addition to, an internal-combustion engine, we are talking about electric motors. That means electrical storage, typically in an electrochemical battery, but capacitors also store and discharge electricity. More exotic solutions include flywheel energy storage (converting mechanical to electrical energy, and vice versa). It's all electrons, however. So, even if we were to concede Mr. Marchionne's point, that the California Air Resources Board's ZEV mandate is not technologically "neutral," that isn't to say the mandate is pushing in the wrong direction.

Unless Fiat-Chrysler has a secret plan to power cars with giant, watch-like mainsprings, electrification (along the spectrum of hybrid, plug-in, and battery-electric vehicle designs) will be a growing part of the product story in the U.S. Why curse it? Would somebody please just tackle the boss?

And of all cars to throw under the bus! The Fiat 500e is just awesome, a nutty electric elf of a car. All dressed up in Playskool aero pieces and available in Life Savers colors, the 500e feels like the big-kid toy the Fiat 500 always wanted to be, with an otherworldly electric hum to go with its whimsical aesthetics. Actually, because of suspension changes to the 500e (it weighs about a quarter-ton more than a regular 500), the wheel clearances look larger, which make the 15-inch wheels seem even more crazy-diminutive and precious. It's like automotive foot binding.

ENLARGE

'The Fiat 500e is just awesome, a nutty electric elf of a car,' writes Dan Neil.
Thaddeus Brown for The Wall Street Journal

And unless I'm mistaken, the 500e actually dances around corners better than the gas-powered Pop edition. The heated and liquid-cooled battery pack under the floor takes the car's weight distribution from a nose-heavy 64/36 front/rear to 57/43, and most of the 500e's additional mass is slung low like ballast in a keel. The reoriented mass gives the 500e a very able, level cornering posture, and the e-steering's turn-in has nice bite to it for a city car. The car's brakes—actually the illusion of friction brakes, since almost all the stopping effort is provided by regenerative braking—feel stout and easily modulated.

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The breakdown: Up front is an AC permanent-magnet motor good for 111 horsepower (10 more than in a standard 500) and 147 pound-feet of torque, channeled through a single-gear transmission to the front wheels (the transmission push-buttons form a vertical row at center-stack in the dash). The lithium-ion battery pack, with a nominal capacity of 24 kwh, consumes about 4 inches of rear legroom and a couple of cubic feet of rear cargo room, but otherwise you wouldn't know it's there.

To further aid in transparency, the 500e's powertrain engineers have provided a kind of artificial idle speed, which allows the car to creep forward when the driver's foot is off the brake, like a conventional car.

According to the EPA, the 500e has a range of 87 miles, with a city/highway fuel economy of 122/108 mpg-e (a gasoline-gallon equivalent unit of energy). I drove the car for two days in Los Angeles, putting on about 65 miles and returning it with about a 25% state of charge. The 500e is equipped with a handsome 7-inch thin-film transistor (TFT) display as the instrument cluster, providing clear and simple readouts for speed, state-of-charge and range. At a 240-volt charging station, the 500e can be topped up in about four hours.

Throw in some hot-rod leather upholstery and the Fiat's charismatic dash design, as well as the EV-specific version of the TomTom navigation unit that plugs into the dash, and you've got yourself a pair of very kinky boots.

The e retrofit flatters the Fiat 500 so well, it's almost as if the company had it planned—which it didn't and wouldn't have, of course, as per Mr. Marchionne. The 500 feels so fulfilled as an electric car. Consider off-the-line acceleration: The base 500, with the 101-hp four-cylinder engine, is completely gutless at low rpm. It just falls on its nose. The Abarth version, with 160 hp and 170 pound-feet of torque, is better, but it, too, requires far too much caning to get going.

Instant, linear torque is just what the 500 needed, and that's what it gets with the e powertrain. Zero to 60 miles per hour is rated at 9.1 seconds (a tick quicker than in the base petrol-powered 500); but the 500e lives and dies by its bright, punchy acceleration from 0-30 mph. At the stoplight drag strip, the 500e has a Mustang-quality hole shot.

Meanwhile, the sweet, nursing-baby-cute 500e is an absolute Godzilla of a lease deal. Thanks to Fiat taking a 10-grand haircut on each one—thanks, Fiat!—California car buyers can lease one of these puppies for $999 down and $199 a month. You can buy one outright, too: the base MSRP is $32,500, but that's before the $7,500 federal tax credit, an additional $2,500 California tax credit and a $2,000 Fiat credit. I feel nakedly incentivized.

The 500e is by no means the only car on the market sold at a loss to its manufacturer. Would you like to add up the costs of the Lexus LF-A program? How about the Nissan GT-R? Even the Corvette's profitability is suspect. But these cars raise awareness, polish the brand image and create loyalty and enthusiasm.

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